While working in Riga and Corby last year, and walking round the large housing estates in both places, I found myself wondering what on earth we are going to do with the large numbers of people who used to be employed in industry and increasingly find themselves not only without jobs but without any real means of finding gainful employment. They can’t all blog, network, and become entrepreneurial!
In the long run I can easily see our current system dominated by large multinational corporations collapsing under the weight of its own disfunction and being replaced by smaller, more local, more networked ways of providing value and trading – but this transition is not going to happen in a hurry and is going to cause a lot of pain as it happens.
This post from Stowe Boyd points to some really interesting thinking on this issue. It also extends the problem from manual workers to “knowledge workers” as robots and automation replace many of the jobs that we currently educate our kids to fulfil.
Stowe includes this quote from Paul Krugman
So should workers simply be prepared to acquire new skills? The woolworkers of 18th-century Leeds addressed this issue back in 1786: “Who will maintain our families, whilst we undertake the arduous task” of learning a new trade? Also, they asked, what will happen if the new trade, in turn, gets devalued by further technological advance?
And the modern counterparts of those woolworkers might well ask further, what will happen to us if, like so many students, we go deep into debt to acquire the skills we’re told we need, only to learn that the economy no longer wants those skills?
Education, then, is no longer the answer to rising inequality, if it ever was (which I doubt).
So what is the answer? If the picture I’ve drawn is at all right, the only way we could have anything resembling a middle-class society — a society in which ordinary citizens have a reasonable assurance of maintaining a decent life as long as they work hard and play by the rules — would be by having a strong social safety net, one that guarantees not just health care but a minimum income, too. And with an ever-rising share of income going to capital rather than labor, that safety net would have to be paid for to an important extent via taxes on profits and/or investment income.
I can already hear conservatives shouting about the evils of “redistribution.” But what, exactly, would they propose instead?
Paul Krugman in Robots and Robber Barons